Correlation Between Vistra Energy and Pollard Banknote
Can any of the company-specific risk be diversified away by investing in both Vistra Energy and Pollard Banknote at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vistra Energy and Pollard Banknote into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vistra Energy Corp and Pollard Banknote Limited, you can compare the effects of market volatilities on Vistra Energy and Pollard Banknote and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vistra Energy with a short position of Pollard Banknote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Energy and Pollard Banknote.
Diversification Opportunities for Vistra Energy and Pollard Banknote
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vistra and Pollard is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and Pollard Banknote Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollard Banknote and Vistra Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vistra Energy Corp are associated (or correlated) with Pollard Banknote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollard Banknote has no effect on the direction of Vistra Energy i.e., Vistra Energy and Pollard Banknote go up and down completely randomly.
Pair Corralation between Vistra Energy and Pollard Banknote
Considering the 90-day investment horizon Vistra Energy Corp is expected to generate 1.84 times more return on investment than Pollard Banknote. However, Vistra Energy is 1.84 times more volatile than Pollard Banknote Limited. It trades about 0.15 of its potential returns per unit of risk. Pollard Banknote Limited is currently generating about 0.25 per unit of risk. If you would invest 14,966 in Vistra Energy Corp on November 2, 2024 and sell it today you would earn a total of 2,664 from holding Vistra Energy Corp or generate 17.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Vistra Energy Corp vs. Pollard Banknote Limited
Performance |
| Timeline |
| Vistra Energy Corp |
| Pollard Banknote |
Vistra Energy and Pollard Banknote Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Energy and Pollard Banknote
The main advantage of trading using opposite Vistra Energy and Pollard Banknote positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Energy position performs unexpectedly, Pollard Banknote can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pollard Banknote will offset losses from the drop in Pollard Banknote's long position.| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Kenon Holdings | Vistra Energy vs. NRG Energy |
| Pollard Banknote vs. Light Wonder | Pollard Banknote vs. Codere Online Corp | Pollard Banknote vs. Inspired Entertainment | Pollard Banknote vs. International Game Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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